Nedbank is seeing growth in customers depositing salaries with it. The green bank published a trading update on Friday morning in which it attributed the "solid" growth in its income to fees and commission, improved transactional activity, better cross-selling, and growth in main-banked clients.Nedbank said it recorded robust growth in both its non-interest revenue (NIR), which is generated through banking fees, and in net interest income (NII), earned from lending activities.
The group's non-interest income grew by "early double digits" in the first four months to 30 April 2022 compared to the first four months of 2021.
This revenue stream was also boosted by the fair value losses recorded in the first half of 2021 that did not recur.
As for net interest income, it grew by "high single-digit" when compared to the first four months of 2021. Nedbank said it recorded "low-to-mid single-digit" loan growth during these four months.
It had "selective" growth in Corporate and Investment Banking (CIB) loans. Loan growth in Nedbank's Retail and Business Bank was also in line with the group's expectation and "slightly ahead of mid-single digits".
And the rising interest rates are benefitting the bank. Its net interest margin has increased from the 373 basis points reported at the end of 2021 to an undisclosed number.
Nedbank has also been attracting more deposits from its customers. Deposit growth was ahead of loan growth. This saw Nedbank grow its market share in the household transactional deposit market by 0.2% to 13.7% in the first quarter of 2022.